Q2 2020 Alimera Sciences Inc Earnings Call

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Operator: Nowak, Richard Eiswirth, James Molloy, Alimera Sciences Inc Nowak, Richard Eiswirth, James Molloy, Alimera Sciences Inc Nowak, Richard Eiswirth, James Molloy, Alimera Sciences Inc © BF-WATCH TV 2021

Ladies and gentlemen.

People standing by.

Good morning, welcome to the friendship second quarter, two thoughts and financial results on corporate update conference call.

Operator: Ladies and gentlemen, thank you for standing by.

Operator: Good morning, and welcome to the Alimera Sciences second quarter 2020 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Participants on the call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call until 30th October 2020. I would now like to turn the call over to Scott Gordon, president of CoreIR, the company's investor relations firm. Please go ahead.

At this time all participants are in the listen only mode.

Do you need assistance, please signal to conference specialist by pressing the star keep falling bicycle.

After todays presentation, there will be an opportunity to ask questions.

You asked a question you made press Star then one on your telephone keypad.

To withdraw your question. Please press Star then do.

Participants on the cold audit WICED that'd be or do you have this conference call. It seems like it's being broadcast live over the Internet and is also being they called it probably back purposes.

Well that's cost replay of the color will be available approximately one hour. After the end of the cold to Tokyo October 2020.

I would now like to turn the call would just got caught him.

President of course, the company's Investor Relations Sir Please go ahead.

Thank you Stanford.

Good morning, everyone. Thank you for participating in todays conference call joining me from Alimera leadership team, our Rick Eiswirth, President and Chief Executive Officer.

Scott Gordon: Thank you, Stanford. And good morning, everyone. Thank you for participating in today's conference call. Joining me from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer, and Phil Jones, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results. Such forward-looking statements involve risks and other factors that may cause actual results to differ materially from those stated. For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC yesterday after the market closed, and Alimera's press release that accompanies this call, particularly the cautionary statement in it.

Scott Gordon: Today's conference call includes adjusted EBITDA, a non-GAAP financial measure that Alimera believes can be useful in evaluating its performance. However, you should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, it is most directly comparable to its most directly comparable GAAP financial measure, please see the reconciliation table located in Alimera's earnings press release. The content of this call contains time-sensitive information that is accurate only as of today, July 30, 2020. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after With that, it is now my pleasure to turn the call over to Rick Eiswirth. Rick, please go ahead.

Phil Jones, Chief Financial Officer.

During this call management will be making forward looking statements, including statements that address our marriage expectations for future performance or operational results.

Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements for more information about these risks. Please refer to the risk factors described in our marriage. Most recently filed periodically reports on form 10-K and form 10-Q.

The form 8-K filed with the FCC yesterday after market closed Aldeyras press release that accompanies this call, particularly the cautionary statement in it.

Today's conference call includes adjusted EBITDA.

Non-GAAP financial measure that Alimera believes can be useful in evaluating its performance you should not consider this additional information in isolation, whereas a substitute for results prepared in accordance with gap.

For a reconciliation of this non-GAAP financial measure to net loss it as most directly comparable it's most directly comparable GAAP financial measure. Please see the reconciliation table located in Alimera earnings press release.

The content up this call contains time sensitive information that is accurate only as of today July Thirtyth 2020, except as required by law Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.

With that because it's now my pleasure to turn the call over to Rick Eiswirth. Rick. Please go ahead.

Thank you Scott and good morning, everybody on the call I'm very excited to share the results that we delivered in the second quarter. This year, especially given the significant challenges. The cobot 19 pandemic has created throughout the world.

Richard S. Eiswirth: Thank you, Scott, and good morning to everybody on the call. I'm very excited to share the results that we delivered in the second quarter of this year, especially given the significant challenges that the COVID-19 pandemic has created throughout the world. We are reporting just over $10 million in consolidated net revenue for the second quarter of 2020. That compares to $10.9 million that we reported in the second quarter of last year.

Richard S. Eiswirth: This was only an 8% decrease despite our limited access to physicians and reduced patient visits over the quarter as a result of the pandemic. We're going to discuss our revenue performance in a little more detail later, but we are also very pleased with our ability to manage our bottom line and our balance sheet during these challenging times. We were able to limit our adjusted EBITDA loss to less than $300,000 during the quarter, which compares very favorably to the adjusted EBITDA loss of $2.1 million that we reported in the second quarter of last year. Importantly, we were able to achieve this without making any changes to our staffing levels across our entire global organization, retaining our commercial team intact, unlike many other small companies and some of our peers.

Richard S. Eiswirth: Because of this, we are able to use some of the downtime to intensely train and prepare to engage with physicians in different ways and bring content to our physicians across the markets in which we sell Alluvium, as restrictions have begun to lessen over the past few months. Additionally, we ended the quarter with an increase in cash over the first quarter, with approximately $13.5 million, up from $12.2 million at the end of the first quarter.

We are reporting just over 10 million in consolidated net revenue for the second quarter 2020 that compares to 10.9 million that we reported in the second quarter of last year.

This was only an 8% decrease despite our limited access to positions and reduce patient visits over the quarter as a result dependent.

We're going to discuss our revenue performance in a little more detail. Later, we're also very pleased with our ability to manage our bottom line and our balance sheet. During these challenging times.

While we were able to limit our adjusted EBITDA loss to less than $300000 during the quarter.

Which compares very favorably to the adjusted EBITDA loss of $2.1 million the reported in the second quarter of last year.

Importantly, we were able to achieve this without making any changes to our staffing levels across our entire global organization retaining our commercial team intact.

Unlike many other small companies and some of our peers.

Because of this we're able to use some of the downtime to intensively train and prepare to engage with physicians in different ways and bring content to our positions across the markets in which we sold it being as restrictions have begun to lessen over the past two months.

Additionally, we ended the quarter with an increase in cash over the first quarter with approximately $13.5 million up from $12.2 million at the end of the first quarter.

As we previously stated we believe the achievement of adjusted EBITDA breakeven in 2019 was an important milestone and demonstrating our financial stability.

Richard S. Eiswirth: As we previously stated, we believe the achievement of adjusted EBITDA breakeven in 2019 was an important milestone in demonstrating our financial stability. We made a strategic decision in early April to control our external expenses so that we would not allow the COVID pandemic to erode this accomplishment while at the same time preserving our workforce. I am proud of our performance.

We made a strategic decision in early April to control our external expenses.

So that we would not allow the covert pandemic to erode this accomplishment while at the same time <unk> preserving our workforce.

I am proud of our performance our ability to deliver a better than expected topline and manage expenses to mitigate the impact to the covert 19 pandemic is a testament to all of our dedicated employees.

Richard S. Eiswirth: Our ability to deliver a better than expected top line and manage expenses to mitigate the impact of the COVID-19 pandemic is a testament to all of our dedicated employees. Because of the COVID-19 pandemic, many patients today are unwilling or unable to visit physicians. Practice and hospital capacity is constrained, with patients being subject to potentially longer intervals between injections of acute or short-term therapeutic options. We believe now more than ever that Illuvian is the right choice for patients suffering from DME and, in Europe, non-infectious uveitis affecting the posterior segment of the eye.

Because of the covert pandemic, many patients today or unwilling or unable to visit positions.

Practice and hospital capacity is constrained having to maintain social dispensing and patients are subject to potentially longer intervals between injections of acute or short term therapeutic options.

We believe now more than ever that Aluminas, the right choice for patients suffering from dealing and in Europe, non infectious uveitis affecting the poster segment of the off.

Now I'd like to provide a little more insight into our revenues for Q2.

Because we've been able to advance some aspects of our strategic growth strategy. Despite the challenges of covered.

Richard S. Eiswirth: Now I'd like to provide a little more insight into our revenues for Q2, because we've been able to advance some aspects of our strategic growth strategy despite the challenges of COVID. In the U.S., our end-user demand was down as expected due to lower patient volumes in physician offices. However, it was not off to the extent patient visits were. We generated 625 units of end-user demand for lubion in the second quarter of 2020, which was down from the 917 units reported in the second quarter of last year. That's off by approximately 32%.

In the U.S., our end user demand was down as expected due to a lesser patient volumes in physician offices. However, it was not off to the extent patient visits were.

We generated 625 units in end user demand for ILUVIEN in the second quarter 2020, which was down from the 917 units reported in the second quarter of last year, that's off approximately 32%.

But office visits and injection volume for gaming patients were down an estimated 60% to 80% when the pandemic spiked in April and May.

Richard S. Eiswirth: But office visits and injection volume for DME patients were down an estimated 60 to 80% when the pandemic spiked in April and May. So we are quite pleased that the decline was limited to that level in May and June. On another positive note, our end user demand has increased in the US since a low point in April as patients began to return to office. Bill will reconcile the difference shortly, but U.S. reported net revenue is $3.4 million for the second quarter of 2020, which is down 53% versus the prior year. This was a result of our U.S. distributors reducing inventory levels during the second quarter as their weekly volumes decreased. We believe this is a timing issue which we would expect to reverse over the remainder of the year as our end-user demand volume returns in the U.S. Our international segment was a standout performer in this challenging environment, reporting $6.6 million in revenue for the second quarter of 2020. That represents growth of 89% over the same period as last year.

So we're quite pleased that that could cause was limited to that level in may and June.

On the auto another positive note our end user demand has increased in the U.S. since a low point in April as patients began to return to offices.

Bill reconcile different shortly but U.S. reported net revenue is $3.4 million for the second quarter, 2020, which is down 53% versus the prior year.

This is the results of our U.S. distributors, reducing inventory levels during the second quarter as their weekly volumes decreased.

We believe this is a timing issue, which we would expect to reverse over the remainder of the year as our end user demand volume returns in the U.S.

Our international segment was a standout performer in this challenging environment reporting $6.6 million in revenue for the second quarter of 2020.

That represents growth of 89% over the same period of last years as last year.

This performance was driven by several components of our strategic Brett plans.

In Germany, and the UK, we continued to see increased usage by physicians treating uveitis patients since our successful launch that indication in those two markets late last year.

Richard S. Eiswirth: This performance was driven by several components of our strategic roadmap. In Germany and the UK, we continue to see increased usage by physicians treating uveitis patients since our successful launch of that indication in those two markets late last year. We do believe that uveitis patients are often viewed as more severe or at greater risk than DME patients, which may have led to less of a slowdown in patient visits and treatment. We also believe that we've done an outstanding job in continuing to shift the positioning of Illumina toward earlier usage in Europe. I've spoken in the past about the impactful Uretinib-2019 meeting, during which Illuvian was presented as a great option for earlier use. In Europe, we are seeing evidence of earlier use of olivine endemy, and just last week, we saw more early cases presented in webinars. And last, our commitment to geographic expansion continues to pay dividends as our distributors in Spain and France both took additional stocking orders during the second quarter despite the COVID slowdown. In fact, Brill Pharma, our Spanish partner, reported a record month of end-user demand for the month of June.

We do believe that you've you had its patients are often viewed as more severe for greater risk than DMD patients, which may have led to less of a slowdown in patient visits and treatments.

We also believe that we've done an outstanding job and continuing to shift positioning, but we've been toward earlier usage in Europe.

Spoken in the past about the impactful you written in 2019 meeting during which ILUVIEN was presented as a great option for earlier usage.

In Europe, we are seeing evidence of earlier use of ILUVIEN in D. me and just last week saw more early cases presented in Webinars.

And last our commitment to geographic expansion continues to pay dividends as our distributors in Spain, and France. Both took additional stocking orders during the second quarter. Despite the cobot slowdown in fact real pharma, our Spanish partner reported a record month of end user demand for the month of June.

We believe that our message is resonating well with physicians that ILUVIEN is an important solution in the treatment of DNA, especially during the pandemic when patients at higher risk for contracting cover 19 are encouraged to minimize their contact with other people in groups, while still being treated for the retinal disease.

Richard S. Eiswirth: We believe that our message is resonating well with physicians that Alluvian is an important solution in the treatment of DME, especially during the pandemic when patients at higher risk for contracting COVID-19 are encouraged to minimize their contact with other people and groups while still being treated for the retina disease. In fact, this past quarter, a UK hospital introduced Alevene as their treatment protocol into their treatment protocol, specifically to help reduce patient visits to the clinic. As we move through the COVID-19 pandemic, we believe physicians will see Illuvin in a new light. It provides significant clinical benefits while reducing the number of visits for high-risk patients and can help doctors work through their backlog of patients who have been untreated or undertreated during the pandemic. And with that, I'll now turn the call over to Phil to provide a brief review of our second quarter financial results.

In fact, this past quarter, a UK hospital has introduced a leaving as their treatment protocol ended their treatment protocol, specifically to help reduce patient visits into the clinic.

As we moved through the curbing 19 pandemic, we believe physicians will see living in a new light. It provides significant clinical benefits, while reducing the number of visits for high risk patients and can help doctors worked through their backlog of patients who've been untreated or under treated during the pandemic.

And with that I'll now turn the call over to fill to provide a brief review of our second quarter financial results, though.

Thanks, Rick and Hello, everyone.

I'll provide a summary of our financial results in the second quarter for more information on these results. Please refer to our press release issued yesterday afternoon as well as our reports on form 10-K, and form 10-Q filed with the SEC.

Phil Jones: Thanks Rick, and hello everyone. I'll provide a summary of our financial results for the second quarter. For more information on these results, please refer to our press release issued yesterday afternoon as well as our reports on Form 10-K and Form 10-Q filed with the SEC. During the second quarter of 2020, our consolidated net revenue declined 8% to $10 million compared to $10.9 million in the second quarter of 2019. U.S. net revenue was $3.4 million for the second quarter of 2020, down 53% year-over-year. As we previously shared, our gap revenues in the U.S. do not always correlate with end-user demand. The difference between gap revenue and end-user demand is due to the timing of the distributor purchase. As weekly volumes decreased in the second quarter due to COVID-19, our distributors lowered their inventory levels and purchased approximately 36% fewer units than they sold to end users. With end-user demand picking back up in recent months, we expect distributor stocking in the U.S. to increase in the third quarter of this year. This assumes states remain open and the economy continues to recover.

During the second quarter of 2020, our consolidated net revenue declined 8% the $10 million compared to $10.9 million in the second quarter of 2019.

The U.S. net revenue was $3.4 million for the second quarter of 2020 down 53% year over year as we previously shared our GAAP revenues in the U.S. do not always correlate with end user demand the differences between GAAP revenue and the end user demand is due to the timing a distributor purchases.

As we complete volumes decreased in the second quarter due to covert 19, our distributors lowered their inventory levels and purchased approximately 36% fewer units and they sold to end users.

With end user demand picking back up in recent months, we expect distributor stocking in the U.S. to increase in the third quarter. This year. This assumes states remain open and the economy continues to recover.

Net revenue from an international segment increased 89% to $6.6 million for the second quarter of 2020 compared to $3.5 million in second quarter of 2019.

Phil Jones: Net revenue from our international segment increased 89% to $6.6 million in the second quarter of 2020, compared to $3.5 million in the second quarter of 2019. Despite the COVID-19 pandemic, our net revenue increased primarily due to sales of our UVI desindication in the UK and Germany and by increased business in our distributor market. To meet the challenges of the COVID-19 pandemic, we worked to reduce external operating spend across all departments where possible during the quarter.

Despite the Koby 19 pandemic, our net revenue increased primarily by sales of our uveitis indication in the UK and Germany and by increased business in our distributor markets.

To meet the challenges of Cobot 19, pandemic, we work to reduce external operating spend across all departments where possible during the quarter.

As a result total operating expenses decreased by approximately 26% to $9.9 million for the second quarter of 2020.

Phil Jones: As a result, total operating expenses decreased by approximately 26% to $9.9 million for the second quarter of 2020. This compares to $13.3 million reported in the second quarter of 2019. We achieved major expense reductions through reduced travel costs, decreased attendance at medical conferences that were cancelled or converted to virtual meetings, and reduced spending on commercial and medical activities.

This compares to $13.3 million reported in the second quarter of 2019.

We achieved major expense reductions through reduced travel costs decreased attendance at medical conferences that were cancelled or converted to virtual meetings and reduce spending on commercial and medical activities.

As we stated in our previous earnings call. We have not made any changes to our staffing levels and do not have any plans to do so.

Phil Jones: As we stated in our previous earnings call, we have not made any changes to our staffing levels and do not have any plans to do so. In the second quarter of 2020, we reported an adjusted EBITDA loss of approximately $300,000 compared to $2.1 million adjusted EBITDA loss in the second quarter of 2019. For the second quarter of 2020, we reported a net loss of $2.5 million compared to a net loss of approximately $5 million for the second quarter of 2019. Basic and diluted net loss per share for the second quarter of 2020 was $0.51 per share on approximately 5 million weighted average shares outstanding. This compares to a basic and diluted net loss per share for the second quarter of 2019 of $1.06 per share on approximately 4.7 million weighted average shares outstanding.

In the second quarter of 2020, we reported net adjusted EBITDA loss of approximately $300000 compared to $2.1 million adjusted EBITDA loss in the second quarter of 2019.

For the second quarter of 2020, we reported a net loss of $2.5 million compared to net loss of approximately $5 million for the second quarter of 2019.

Basic and diluted net loss per share for the second quarter of 2020 was 51 cents per share on a process over approximately 5 million weighted average shares outstanding. This compares to basic and diluted net loss per share for the second quarter of 2019 of one dollar and six cents per share on approximately 4.7 million weighted.

Average shares outstanding.

On June Thirtyth 2020, we had cash and cash equivalents of approximately $13.5 million, an increase of 4.1 million from the $9.4 million in cash and cash equivalents that were reported on December 31, 2019, and a 1.3 million dollar increase from the $12.2 million in cash and cash.

Phil Jones: On June 30, 2020, we had cash and cash equivalents of approximately $13.5 million, an increase of $4.1 million from the $9.4 million in cash and cash equivalents that were reported on December 31, 2019, and a $1.3 million increase from the $12.2 million in cash and cash equivalents that we reported on March 31, 2020. And with that, I'll now turn the call back over to Rick to wrap up our prepared remarks.

Cash equivalents that we reported on March 31 2020.

And with that I'll now turn the call back over to Rick to wrap up our prepared remarks Rick.

Thank you Phil I'd now like to spend a few moments reviewing the highlights of our new day study our landmark trial, comparing ILUVIEN to anti VEGF therapy as first line therapy in the treatment of deeming patients.

Richard S. Eiswirth: Thank you, Phil. I'd now like to spend a few moments reviewing the highlights of our new day study, our landmark trial comparing alluvium to anti-VEGF therapy as first-line therapy in the treatment of DME patients. On July 15th, we hosted a conference call to discuss the details of the study. You can access a replay of that call on our website in the Investor Relations section, and you can find more details on clinicaltrials.gov as well. This is a very important trial for Alimera, one that can validate our belief that Alluvion is a better mousetrap or a better way to treat DME, and one that we believe can give Alluvion access to a much greater share of the revenue in this multi-billion dollar market currently dominated by anti-VEGFs as the standard of care.

On July 15th we hosted a conference call to discuss the details of the study you can access a replay of that call on our website in the Investor Relations section and you can find more details on clinical trials clinical trials Buck of as well. This is a very important troffer alimera one can validate our belief that ILUVIEN is a better mousetrap or a better way to treat the.

And one that we believe can give ILUVIEN access to a much greater share of the revenue in this multibillion dollar market currently dominated by anti VEGF agents as the standard of care.

On our recent call with our Chief Medical Officer, Dr., Samaras, Cabo and a practice practicing retina specialist Dr. victory Gonzalez spoke to the shortcomings of anti VEGF therapy as the standard of care in treating Danny.

Richard S. Eiswirth: On our recent call, both our Chief Medical Officer, Dr. Sam Urcaba, and a practicing retina specialist, Dr. Victor Gonzalez, spoke to the shortcomings of anti-VEGF therapy as the standard of care in treating DME. First, anti-VEGF therapies treat the vascular aspects of DME and do not address all of the inflammatory aspects. If left unchecked, this inflammation can lead to greater edema and damage to the retina.

First anti VEGF therapy to treat the vascular aspects of deeming and do not address all of the inflammatory aspects. If left on checked this inflammation can lead to greater DEMA and damage to the retina.

Second the anti VEGF therapy is do not work for all DMD patients.

Protocol T demonstrated the despite six monthly injections with anti VEGF therapy regimen that is much more frequent that occurs in the real world, 30% to 65% of patients continue to have persistent edema.

Richard S. Eiswirth: Second, anti-VEGF therapies do not work for all DME patients. Protocol T demonstrated that despite six monthly injections with Anti-VEGF therapy, a regimen that is much more frequent than occurs in the real world, 30 to 65 percent of patients continue to have persistent edema.

And third the current anti VEGF therapy is that our short term or acute treatments require frequent injections for optimal results to achieve optimal control. It de me anti VEGF injections shouldn't be administered monthly to obtain the results shown in pivotal phase three studies.

Richard S. Eiswirth: And third, the current anti-VEGF therapies that are short-term or acute treatments require frequent injections for optimal results. For example, to achieve optimal control of DME, anti-BGF injections should be administered monthly to obtain the results shown in pivotal phase three studies, and there is a clear correlation across numerous studies that indicate fewer injections lead to lower visual acuity results. We shared data on that call from an analysis of over 35,000 patients on current anti-VEGF therapies that patients do receive fewer injections in the real world. On average, fewer than four anti-VEGF injections per year. And finally, DME patients generally have multiple health problems that are frequently less adherent to a visit schedule. These DME patients are burdened with multiple appointments with multiple health care providers because of their underlying disease.

And there is a clear correlation across numerous studies that indicate fewer injection leads to a lesser visual acuity results.

We shared data on that call from an analysis of over 35000 patients on current anti VEGF therapies that patients do receive fewer injections in the real world on average fewer than for anti VEGF injections per year.

And finally DMD patients generally have multiple health problems that are frequently less adherent to visit schedules. These DMD patients are burdened with multiple appointments with multiple health care providers because of their underlying disease.

More than 50% of working patients take a day off to attend the clinic, making it a further challenge to obtain more frequent injections.

Richard S. Eiswirth: More than 50% of working patients take a day off to attend the clinic, making it a further challenge to attain more frequent injections. We believe that Alevene addresses these issues for physicians and patients because it delivers a corticosteroid that provides broad anti-inflammatory protection, and it delivers that corticosteroid in a consistent, continuous microdose for up to three years to keep the edema in the eye quieter longer. But we do need to run this trial to provide the data to physicians because there's never been a direct comparison between eluvian and any other steroid in anti-vegist therapy. As Dr. Gonzales shared on our call, retina specialists are highly data-driven.

We believe that ILUVIEN addresses these issues for physicians and patients because it delivers a corticosteroid the provides broad anti inflammatory protection and it delivers that corticosteroid and a consistent continuous microdisplay for up to three years to keep the edema and the pie quieter longer.

But we do need to run this trial will provide the data to physicians because there is not ever been a direct comparison between ILUVIEN or any other steroid and anti VEGF therapy.

As Dr. Gonzales shared on our call retina specialists are highly data driven.

We have already accumulated significant data demonstrating why we believe that we've been should be used as first line therapy for treating the me.

Richard S. Eiswirth: We have already accumulated significant data demonstrating why we believe that olivine should be used as first-line therapy for treating DME. For example, our user study showed that on average, patients' visual acuity was either improved or maintained with a significant reduction in treatment frequency from one treatment every 2.9 months pre-olivine to one treatment every 14.3 months post-olivine. User also showed that in 63% of the 160 eyes treated in the study, Bolivian was sufficient as monotherapy, and no supplemental therapy was required. Our iris and paladin studies also showed that alluvium worked without supplemental therapy in a high percentage of patients.

Our user study showed that on average patient visual acuity was either improved or maintain with a significant reduction and treatment frequency from one treatment every 2.9 months pre ILUVIEN to one treatment every 14.3 months post ILUVIEN.

User also showed that in 63% of 160 eyes treated in the study, but we've been with sufficient as monotherapy and no supplemental therapy was required.

Our Iris and Paladin studies also showed that will even worked without supplemental therapy in a high percentage of patients.

We're very excited to advance the new day study and believed in the coming months. The New day study can increase the awareness and discussion of the movement amongst physicians.

Richard S. Eiswirth: We're very excited to advance the New Day Study and believe that in the coming months, the New Day Study can increase the awareness and discussion of lubrication amongst physicians. Moving forward, we do expect that the pandemic will continue to adversely impact our business in ways we can't currently forecast, as we are still experiencing limited engagement in physician offices and hospitals. But so far, 2020 has been a really good year for Alimera in light of all the difficult challenges resulting from the COVID-19 pandemic. For the first half of this year, we reported a total of $24.6 million in revenue, growth of 3% over the $23.8 million in 2019 despite the challenges of the pandemic. Importantly, we've maintained our goal of being adjusted EBITDA positive for the first six months of the year, recording $1 million in adjusted EBITDA, and we strengthened our balance sheet by adding cash without further dilution to our shareholders. We accomplished all of this while retaining our staff, which we believe positions us well to reach our customers and increase the usage of olivine as the pandemic resolves and the economy fully reopens. We have prepared our sales force with remote detailing capabilities.

Moving forward, we do expect that the pandemic will continue to adversely impact our business in ways. We can't currently forecast as we are still experiencing limit engagement in physician offices and hospital.

But so far 2020 has been a really good year for Alimera in light of all the difficult challenges, resulting from the koby 19 pandemic.

For the first half of this year, we reported a total of 24.6 million in revenue growth of 3% over the 23.8 billion in 2019, despite the challenges of the pandemic.

Importantly, we maintained our goal of being adjusted EBITDA positive for the first six months of the year recording $1 million an adjusted EBITDA.

And we strengthened our balance sheet, adding cash without further dilution to our shareholders.

We accomplished all of this while retaining our staff, which we believe it positions us well to reach our customers an increase the usage of ILUVIEN as the pandemic resolves and the economy fully reopens.

We have prepared our salesforce with remote detailing capabilities, we have been successful in developing and hosting educational webinars to speak to the value and benefit of ILUVIEN.

That can be provided to both deeming patients and posterior uveitis patients.

Richard S. Eiswirth: We have been successful in developing and hosting educational webinars that speak to the value and benefit of alluvium that can be provided to both DME patients and posterior uveitis patients. We have continued to execute our strategy of pursuing organic growth and DME in our existing market, preparing for the launch of the Posterior Uviatus Indication in more European markets, and further expanding our geographic footprint, all of which we believe will continue to contribute to our growth in revenues and give patients the opportunity to see better longer with fewer injections. But importantly, we believe that much of what we've achieved over the last ten months has positioned us very well to absorb these challenges associated with the COVID pandemic and, importantly, to invest in Alimera's future by conducting the New Day study, to enable us to gain a greater share of the multi-billion dollar market opportunity for treating diabetic macular dementia. And with that overview, we are now ready to take questions.

We have continued to execute our strategy of pursuing organic growth endymion, our existing markets preparing for the launch of the poster you gotta syndication and more European markets and further expanding our geographic footprint.

All of which we believe will continue.

To contribute to our growth in revenues and give patients the opportunity to see better longer for few injections.

But importantly, we believe that much of what we've achieved over the last few months has positioned us very well to absorb these challenges associated with the koby pandemic and importantly to invest in alimeras future by conducting the new day study to enable us to gain a greater share of the multibillion dollar market opportunity for treating diabetic macular edema.

And with that overview, we're now ready to take questions operator.

Thank you.

Ladies and gentlemen, if you wish to ask a question on todays call.

Chris Dodd Bend the number one.

Operator: Ladies and gentlemen, if you wish to ask a question on today's call... Please press star then the number 1 on your telephone. If your question has been answered and you wish to withdraw your request, you may do so by pressing the star, then the number. If you are using a speakerphone, please pick up your handset before entering your request and speaking on the call. One moment please for the question. We take the question from the line of Alex Nowak from Craig Harlem Capital Group. Please go ahead. Greg, good morning everyone. Rick, based on your comment around Alluvian's decline being a lot less in the US than the patient decline in the retina clinics as a whole, are you hearing from physicians specifically saying that they're moving to Alluvian because they just don't know when they're gonna see that patient again and thus can't reliably do an anti-VEGF? And kind of following on from that, can you say what the growth in new doctor's orders was throughout Q2?

Yes.

If your question has been answered on you wish to withdraw your other question you may do so by pressing the Star then number two.

If you are using the speakerphone. Please pick up your handset before entering your request and speaking on the goal.

One moment please for the question.

Okay.

We take the question from to line up Alex No up from Craig Hallum capital.

Please go ahead.

Great Good morning, everyone.

Rick based on your comment around Iluviens decline being a lot less in the U.S. than the patient decline in the right at clinics. The whole are you hearing from position, specifically, saying that they're moving to a low bad because they just don't know when they're going to see that patient again invest can reliably do anti bed, Jeff and just kind of following on to that can you say what that grow.

Growth in new doctors orders were throughout Q2.

So Alex I think I mean, it's a it's a little bit of a mixed bag depends from physician that position. We have heard feedback from physicians that some of them view ILUVIEN in a slightly different light and wish that had more patients on ILUVIEN. When the pandemic started right. So that they would feel comfortable that that patient had some sort of therapy on board and.

Richard S. Eiswirth: So, Alex, I think, I mean, it's a little bit of a mixed bag, you know, and it depends from physician to physician. We have heard feedback from physicians that, you know, some of them view alluvium in a slightly different light and wish that they'd had more patients on alluvium when the pandemic started, so that they would feel comfortable that that patient had some sort of therapy on board and the disease was being treated every day while they were out and missing these visits. So, I do believe that there are some physicians that, as patients have come back in, have considered alluvium and put patients on alluvium to give them that more durable therapy because they don't know when they're going to come back.

The disease are being treated everyday while they are out in missing. These are there. So I do believe that there are some physicians that as patients have come back in.

Have considered ILUVIEN and put patients on a leaving to give them that more durable fair because they don't know when they're going to come back, but obviously with 625 units, it's hard to say, but that's a trend at this point.

We have seen.

Richard S. Eiswirth: But obviously, with, you know, 625 units, it's hard to say that that's a trend at this point. You know, we have seen a greater usage of alluvium, I think, or, sorry, less of a decline in alluvium usage than what we believe we're hearing about, you know, DME patient visits. I think that's because some of these patients that are more severe, you know, are being treated and moved to alluvium a little bit, a little bit faster maybe.

We have seen a greater usage of ILUVIEN, I think or sorry less of a decline in moving usage than what we believe we're hearing about DMD patient visits and I think thats because some of these patients that are more severe.

You know are being treated and move until we've been a little bit little bit faster maybe.

Okay got it and then assuming you saw the rebound over the course acute to where they will be in the low watermark and.

Richard S. Eiswirth: Okay, got it. And then, you know, assuming you saw the rebound over the course of Q2 with April being the low watermark and, you know, increasing every month thereafter, how has the rebound in July for Q3 been here? Is each week in July still higher than the last, or have you started to see any items start to plateau at all?

Increasing every month thereafter, how does the rebound in July for Q3 bad years. Each is each week in July still higher than the last or have you started to see any item start to plateau at all.

Yeah. So.

Hi, it's a it's been a little bit up and down in July I think we've got a couple of days of sales still to reporting going in for July I think we will trend up a little bit in July over June, but I do think that.

Richard S. Eiswirth: Yeah, so it's been a little bit up and down in July. I think, you know, we have a couple of days of sales still to report and get in for July. I think we will trend up a little bit in July over June, but I do think that, and it's one of the reasons I mentioned where I said we continue to be adversely impacted, I do think we've seen a little bit of this second wave or spike in cases impact us a little bit. So, you know, we saw Florida open up, for example, in late May and June, but then it seemed like some more restrictions in Florida So, you know, I don't think we're out of the woods yet. I do think we're trending up, but not nearly to the volumes we were doing in the fourth quarter of last year yet because of the restrictions.

It's one of the reasons I mentioned I said, we continue to be adversely impacted I do think we've seen a little bit of this second wave or spike in cases impact us a little bit you know so we saw it we certainly saw Florida open up for example in late May and June.

But then it seemed like some more restrictions in Florida impacted as is just one example, so.

I think I don't think rather the woods, yet I do think we're trending up but not nearly to the volumes we were doing in the fourth quarter last year, yet because of the restrictions.

Okay understood and then how far penetrator are you into that you'd be at its population in the markets that you have reimbursement obviously, that's been a we think it's a pretty good waiting for you.

Richard S. Eiswirth: How far penetrated are you into the UVS population in the markets that you have reimbursed? What we think is a pretty good win for you from the OUS revenue. And when would you expect to expand to new countries? Is there any timeline update on that?

From a nail U.S. revenue.

And when would you expect to expand into new countries, just any timeline update on that.

Yes so.

So we are doing pretty well in Germany. The UK. There are there is a key hospital in each of Germany in the UK that have really increase their usage for uveitis I mentioned, one of the UK hospitals, it sort of change their protocol to try to decrease the number of on Tom you guys patients revenue come in especially minutes payment.

Richard S. Eiswirth: Yeah, so we're doing pretty well in Germany and the UK. There is a key hospital in each of Germany and the UK that has really increased their usage for uveitis. I mentioned one of the UK hospitals that sort of changed their protocol to try to decrease the number of times uveitis patients are having to come in, especially in this pandemic. So I'd say we've had great usage in a couple of hospitals, but I think there's still a lot of opportunity in both Germany and the UK for that indication. As far as other markets are concerned, some of the pricing negotiations have been slowed down a little bit this year because of COVID and because of people in the regulatory bodies being out. So I think most of it will occur in 2021, which will add Portugal, France, Spain, and, hopefully, Italy. Hopefully, those four markets will be added in 2021.

Demicks. So I'd say, we've had great usage and a couple of hospitals, but I think there's still a lot of opportunity both Germany UK that indication.

As far as other markets some of the pricing negotiations have been slowed down a little bit this year because of coded and because of people on the regulatory bodies being out. So I think most of it will occur in 2021 that will add Portugal, France, Spain, and hopefully, Italy, hopefully those four markets in 2021.

Okay got it just last quick question. This is little bit of a follow up to prior questions.

We just called.

Richard S. Eiswirth: Okay guys, just last quick question. This is a little bit of a follow-up to prior questions and previous calls. The OUF number of about six, six and a half million, is that a new benchmark number, or were there really any one-time stocking items in there that just made that number unsustainable when we put them all together?

The number of about six six and a half million. It is that a new benchmark number or where they are really any one time stocking items and that it just makes that number on sustainable when we put them all together.

Yeah, I mean, you do have a couple of a stocking orders as I mentioned from our French in our Spanish distributors, which they went ahead and took in the second quarter. Although their volume is down so I think you'll see some inconsistency in the third and fourth quarter because they will have to work some of those down so 6.6 might be a little bit high at this point, we're not going to give specific guidance because there's so much on.

Richard S. Eiswirth: Yeah, I mean you do have a couple of stocking orders, as I mentioned, from our French and our Spanish distributors, which they went ahead and took in the second quarter, although their volume is down. So I think you'll see some inconsistency in the third and fourth quarter because they will have to work some of those down. So 6.6 might be a little bit high at this point. But we're not going to give specific guidance because there's so much uncertainty out there still. But probably a little bit high because they continue to take orders, but now they've got to work those off in the second half.

And the out Theres still but.

Probably a little bit high because they continue to take the orders, but now they've got to work those off in the second half the year.

Okay understood. Thank you.

Thank you.

The next question from the line of James from aligns Global documents. Please go ahead.

James Francis Molloy: Okay, understood. Thank you. Thank you. We take the next question from the line of James Molloy from Alliant Global Partners. Please go ahead.

Hey, guys. Thank you very it's taking the questions and excellent job in holding the line in Europe.

I know a tougher environment in the U.S., how much can you speak to sort of.

Richard S. Eiswirth: Hey guys, thank you very much for taking the questions and an excellent job holding the line in Europe. I know a tougher environment in the U.S. How much can you speak to sort of the control of the virus that seems to be in place in the EU versus the U.S. driving those volumes and, I guess also, is there... The adjustments you've made for, So, what have been the most effective of those adjustments that you've made, and are those something that you can keep going forward and keep the GNA at lower levels?

Control viruses PC in place users.

U.S. driving.

Those volumes.

And.

And I guess also is there.

The adjusted you've made.

Selling from home and working from home I guess, what are the most effective all those adjustments that you've made and it does something that so they can keep you can keep going forward and sort of keep that DNA at these lower levels.

I don't.

I'll answer the last part of the question as I don't think.

Long term, we can continue to keep the cost of these levels, because frankly, we want to get out there and try to drive that topline faster right and so we'll have to.

Richard S. Eiswirth: I'll answer the last part of that question first. I don't think long term we can continue to keep the cost at these levels because, frankly, we want to get out there and try to drive that top line faster, right? And so we'll have to travel more, re-engage with doctors, be at some of the meetings, and everything. I do think the mix and the way we engage will change. There'll be more virtual engagement.

Travel more reengaged with doctors be at some of the meetings and everything I do think the mix in the way we engage will change there will be more virtual engagement, we have prepared and trained all of our reps to be able to detail virtually with the doctors, but frankly, there is a learning curve there for both the reps and the doctors right. The doctors have to get used to that level engagement in some doctors.

Richard S. Eiswirth: We have prepared and trained all of our reps to be able to detail products virtually with the doctors, but frankly, there's a learning curve there for both the reps and the doctors, right? The doctors have to get used to that level of engagement, and some doctors are comfortable with that already, and some aren't. So I think that's something that'll evolve over the rest of the year.

We're comfortable that already in some on so I think that was something that will evolve over the rest of the year.

Thank you know with respect to your question about about Europe, you know the German market is very very strong and I think the reason, we see the German market strong as because a lot of those.

Richard S. Eiswirth: I think with respect to your question about Europe, the German market is very, very strong, and I think the reason we see the German market so strong is because a lot of those physicians are working in private practices, right? Just like US doctors do, and they're motivated to get back there and continue to treat patients and make money. And so we've seen good control, and physicians in Germany seem to have access to patients. It's a little bit more restricted in countries like the UK and in Southern Europe, where most of it is nationalized healthcare, and hospitals are tied into the national system, and therefore they've kept them closed or restricted to really control that social distancing. So there is more access in Northern Europe than in Southern Europe.

Physicians their work in private practice right, just like us doctors do and they're motivated to to get back there and continue to treat patients and and make money and so we've seen.

Good control and the physicians in Germany can seem to have access to patients so little bit more restricted in the countries like the UK and in southern Europe, where.

Most of its nationalized healthcare in the hospitals are tied into into the national system, and therefore, they've kept them closer restricted to really control that social distancing. So.

You know more access in northern Europe in Southern Europe.

No.

Okay, maybe a quick follow up.

What's been the reaction has any anecdotal reaction to the Newgate trial.

Richard S. Eiswirth: Maybe a quick follow-up, what's been the reaction, has there been any anecdotal reaction to the New Day trial since you guys had your announcement a couple weeks ago? Where does R&D go as that trial ramps up?

Since you guys had your announcement a couple weeks ago.

And.

Where does R&D go to answer a trial ramps up.

So.

I think there's we've definitely got some excitement generated around it we've had a few inbound calls from physicians that have been interested in participating this study.

Richard S. Eiswirth: So, I think we've definitely got some excitement generated around it. We've had a few inbound calls from physicians that have been interested in participating in the study and being a clinical site, so we're pretty excited about that. We do have three or four sites that are now actively enrolling patients. In fact, I believe we had the first patient screened into the study yesterday, which hopefully means within the next couple of weeks, we'll be able to announce the first patient being randomized into the study. So, I think we're off to a good start there. With respect to the expenses, I'll let Phil comment on this, but I think you're probably looking at more R&D expenses like we saw in 2018 and 2019 because we moved some expenses away from Paladin and the Iris Study.

And being a clinical site. So we're pretty excited about that we do have three or four sites that are now actively enrolling in fact I believe we had the first patient.

Screamed into the study yesterday, which hopefully means within the next couple of weeks will be announced the first patient being randomized and and in this study. So I think off to a good start there for with respect to the expenses.

I don't I'll, let they'll come in this but I think youre, probably looking at more R&D expenses like we saw in 18 and 19, because we moved some expenses away from Paladin in now.

And the Irish study.

Yes, Jim I would confirm what Rick said I mean that did that we will move back to that level of spending for those for those R&D expenses move towards because we did have some some of those items drop off and we were able.

Phil Jones: Yeah, Jim, I would confirm what Rick said. I mean, we'll move back to that level of spending for those R&D expenses moving forward because we did have some of those items drop off, and we were able in Q2 to save some money through the COVID spending constraints that we put on prior to the study being initiated.

In Q2, two to save some money through the cobot spending.

Constraints that we put on prior to the study being being initiated.

Excellent thanks for taking the questions.

Sure.

Thank you.

Next question is from the line up Chen from it C. Wainwright. Please go ahead.

James Francis Molloy: Excellent, thank you for taking the question. (inaudible)

Thank you for taking my questions.

Deployment would you be able to differentiate.

The.

Yi Chen: Thank you for taking my questions. At this point, would you be able to differentiate prescriptions for uveitis versus prescriptions for DME in Europe?

Prescriptions for you'd be at us versus the prescriptions for PMT in Europe.

Yeah, Yeah. Good morning, you know Unfortunately, we cannot we don't have individual script data.

Richard S. Eiswirth: Yeah, Yi, good morning. Unfortunately, we cannot. We don't have individual script data in Europe to know what DME and what uveitis are. I do know, anecdotally, that we are seeing good sales. And much of the growth is made up from the uveitis side of the business stuff at this time. Thank you.

In in Europe.

Good to know what is the EMEA and once you have yet as I do know anecdotally that we are.

Seeing good sales.

In a much of the growth has made up from the United side of the business, though.

At this time thank you.

Second question those in the U.S. do you expect distributors to maintain a low even tree level.

Yi Chen: Thank you. Got it. My second question is, in the U.S., do you expect distributors to maintain a low inventory level as the new COVID-19 cases continue to surge in the country?

As you Colin I think is continue to search the country.

Well I think it's going to talk to it will correlate directly with what our sales volumes are right in our sales volumes.

Richard S. Eiswirth: Well, I think it's going to tie directly into, you know, what our sales volumes are, right? You know, our sales volumes in the fourth quarter of last year in the U.S. were very high, and they, you know, continued to build up inventory, and they've brought it down as, you know, COVID has suppressed some of that volume. You know, it's very, very small numbers, but, you know, as sales picked up in June and July, we saw them start to close some of that gap. So I think that, you know, they will continue to build inventory if the weekly volumes dictate that they need to hold more.

In the fourth quarter of last year in the U.S. were very high and they continue to build up inventory and they brought it down as cobot has suppressed some of that volume.

It's very very small numbers, but you know as sales picked up in June and July we saw them start to close some of that gap. So I think that they will continue to build inventory if the weekly volumes dictate that we need to they need to hold more.

Okay got it.

And do you expect sales and marketing expenses during the second half appeared to remain at second quarter levels.

Richard S. Eiswirth: Okay, got it. And do you expect sales and marketing expenses during the second half of the year to remain at second quarter levels?

Not not as low as the second quarter mean, we expect that we'll continue to recover some of the revenue, but our focus is going to continue for the third quarter to minimize any EBITDA loss in trying to try to operate right. There at breakeven Theres quite a few trade shows and things like that that have been postponed you retina has been cans.

Richard S. Eiswirth: Not as low as the second quarter. I mean, we expect that we'll continue to recover some of the revenue. But our focus is going to continue for the third quarter to minimize any EBITDA loss and try to operate right there at breakeven. There are quite a few trade shows and things like that that have been postponed. Uretna has been canceled or will be virtual. The AAO that's in November will be virtual. So there are places where we're going to be able to control our spending just because the industry as a whole is not operating in person. So we think we can control expenses. But the goal is to really spend at the level that we're generating revenue and operate right there at breakeven.

Solar will be virtual the Oh thats in November will be virtual. So you know, there's places where we're going to be able to control our spending just because the industry as a whole is not operating in person.

So we think we can control expenses, but the goal is to really spend at the level that we're generating revenue and operate their breakeven.

Got it thank you.

Absolutely. Thank you.

Thank you.

Yi Chen: Thank you. Absolutely. Thank you.

Hi, discipline Fabulous and last question.

The conference over to rig for closing comments.

Alright, great I want to thank you all for participating in today's call and for your interest is Alimera Sciences. We we do look forward to sharing our progress at our next quarterly call I want to report our third quarter results. Thank you and have a wonderful that.

Richard S. Eiswirth: Thank you. Participant fumbles the last question. I now hand the conference over to Rick for closing comments.

Richard S. Eiswirth: I want to thank you all for participating in today's call and for your interest in Alimera Sciences. We do look forward to sharing our progress in our next quarterly call when we report our third quarter results. Thank you, and have a wonderful day.

Operator: Participants, the conference call has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Thank you.

The conference call and has now concluded.

Thank you for attending today's presentation you may now disconnect your lines.